The protection of small and medium-sized investors is real! The China Securities Regulatory Commission (CSRC) has intensively issued ten major protection systems

　　Source: Kale Pictures Ning Ying/photo

　　On May 15, the first "5.15 National Investor Protection Publicity Day" after the promulgation of the new "National Nine Measures" was held in Beijing. On the day of the event, the China Securities Regulatory Commission (CSRC) issued 10 institutional rules closely related to investor protection, including the Administrative Provisions on Programmatic Trading in the Securities Market (Trial) (hereinafter referred to as the "Administrative Regulations"), the Guidelines for the Application of Regulatory Rules - Issuance No. 10, the Work Plan on Improving the Diversified Resolution Mechanism for Securities and Futures Disputes and Deepening the Governance of Litigation Sources, as well as the business rules of relevant self-regulatory organizations and insurance institutions.

　　Wu Qing, Secretary of the Party Committee and Chairman of the China Securities Regulatory Commission, said in his speech at the event that the China Securities Regulatory Commission is currently thoroughly implementing the spirit of the Central Financial Work Conference, fully implementing the new "National Nine Articles", and solidly promoting the implementation of the "1+N" policy system in the capital market. The core content is to promote strong supervision, risk prevention, and high-quality development in an integrated manner, strengthen the foundation, strictly supervise and strictly manage, and accelerate the creation of a "safe, standardized, transparent, open, resilient, and vibrant" capital market.

　　The latest release of the 10 insurance regimes

　　At the event site on the same day, the China Securities Regulatory Commission, the Stock Exchange, the China Securities Association, and the Investment Service Center all took action, and on the whole, they all aimed to more effectively protect the legitimate rights and interests of small and medium-sized investors.

　　The China Securities Regulatory Commission (CSRC) issued the Administrative Regulations, which for the first time made more comprehensive and systematic provisions on programmatic trading activities, which is conducive to strengthening the supervision of programmatic trading in the securities market, promoting the standardized development of programmatic trading, maintaining the order of securities trading and market fairness, and more effectively protecting the legitimate rights and interests of small and medium-sized investors.

　　The China Securities Regulatory Commission (CSRC) issued the Guidelines for the Application of Regulatory Rules - Issuance No. 10, which clearly requires issuers to timely and accurately disclose important information related to the interests of investors, such as future development plans, use of raised funds, cash dividend plans, and estimated profit time, and urges issuers to establish a concept of being responsible for investors and improve the quality of listed companies from the source.

　　The China Securities Regulatory Commission (CSRC) issued the "Work Plan on Improving the Diversified Resolution Mechanism for Securities and Futures Disputes and Deepening the Governance of Litigation Sources", which is conducive to improving the ability to prevent and resolve conflicts and disputes in the capital market and the level of rule of law, giving full play to the basic role of mediation, promoting the prevention of conflicts and disputes at the source and substantive resolution on the spot, and ensuring that investor protection is implemented.

　　The Shanghai Stock Exchange issued the Measures for Letters and Visits, the Measures for Whistleblowing and the Measures for Investor Service Hotlines. The three rules clarify that the main matters in each link such as receiving, handling and replying are concise, friendly and clear, which is conducive to investors forming clear expectations for the handling of claims and improving the quality and efficiency of investors' comprehensive services.

　　The "Standards for Handling Complaints of Securities Companies" and "Standards for Customer Return Visits of Securities Companies" issued by the China Securities Association establish group standards for securities companies to carry out relevant work and further improve investor satisfaction.

　　The China Securities Small and Medium-sized Investor Service Center issued the "Working Rules for the Exercise of Shareholdings" and the "Business Rules for Public Solicitation of Shareholders' Rights", which further focused on the concerns of small and medium-sized investors and the news media, improved the decision-making procedures for the exercise of shareholdings such as public solicitation of shareholders' rights, strengthened the discipline and restraint of the exercise of shares, and improved the scientific and standardized level of the exercise of shareholdings.

　　Give investors more substantial fairness

　　The Administrative Provisions clarify the overall requirements for the supervision of programmatic trading, that is, "the activities related to programmatic trading in the securities market shall follow the principle of fairness and shall not affect the security of the stock exchange system or disrupt the normal trading order".

　　It is reported that the China Securities Regulatory Commission is promoting the establishment of a three-dimensional rule system for programmatic trading, and the "Management Regulations" are mainly to clarify the regulatory framework of the "General Administration", and authorize the stock exchange and industry associations to make special provisions on specific measures, and gradually form a three-dimensional rule system that connects the "Management Regulations", the implementation rules, and the specific business rules of the exchange and the association.

　　Subsequently, the Shanghai and Shenzhen North Stock Exchanges, the Securities Industry Association, and the Asset Management Association will also issue relevant business rules to clarify the specific arrangements for abnormal transaction monitoring, value-added market fees, differentiated fees for high-frequency trading, entrustment agreement templates, northbound programmatic transaction supervision, emergency handling, technical system management, colocation, system access, etc.

　　According to Zhang Wangjun, director of the First Department of the Market of the China Securities Regulatory Commission, the relevant business rules and rules of stock exchanges and industry associations will mature and be launched.

　　"The Administrative Provisions are an important rule that 'connects the previous and the next', which is not only a concrete implementation of the relevant procedural transaction management provisions in the Securities Law, but also points out the direction for the exchange to issue relevant procedural transaction management business rules." Li Zhan, chief economist of the research department of China Merchants Fund, said that the "Management Regulations" respond to the market's main concerns about programmatic transactions, fully embody the ideas and concepts of "pursuing advantages and avoiding disadvantages, highlighting fairness, effective supervision, and standardized development", which is of great positive significance for the stable and healthy development of the market.

　　The main contents of the Guidelines for the Application of Regulatory Rules - Issuance No. 10 include: First, the issuer is required to publish a statement to investors in the prospectus, explaining the basic information such as the purpose of listing, the establishment of a modern enterprise system and the necessity of financing, and urging the issuer to firmly establish a correct "listing view". The second is to clarify that the "key minority" can make a commitment to extend the share lock-up period in the event of a sharp decline in performance after listing, and strengthen the awareness of the "key minority" to share risks with investors. The third is to improve the information disclosure rules of the post-listing dividend policy, so as to help investors form stable return expectations. Fourth, strengthen the disclosure of relevant information of unprofitable enterprises, requiring them to disclose forward-looking information such as expected profitability, so as to fully disclose the future development prospects to investors and facilitate investors' decision-making.

　　In the next step, the China Securities Regulatory Commission will continue to fulfill its responsibility to protect the legitimate rights and interests of small and medium-sized investors, implement the rules, tighten and consolidate the responsibilities of all parties in the whole chain of issuance supervision, and improve the quality of listed companies from the source.

　　Investors are the foundation of the market

　　Investors are the foundation of the market. How to protect investors? Wu Qing, chairman of the China Securities Regulatory Commission, believes that this is inseparable from all aspects of the construction of the capital market system and supervision and law enforcement.

　　Further consolidate the institutional foundation for investor protection. In the process of formulating and revising the system, we fully listen to the opinions and suggestions of investors, especially small and medium-sized investors, pay more attention to the fairness of the system, and provide investors with more substantive fair protection.

　　Further promote the improvement of the quality of listed companies. From the "entrance" of listed companies to continuous supervision and then to the "export", more stringent institutional arrangements are being established. The purpose is to resolutely keep counterfeiters out, implement the requirements of openness and transparency in the whole process of corporate information disclosure, integrate the concept of respecting investors and rewarding investors into various mechanisms of corporate governance, and resolutely remove "zombie enterprises" and black sheep from the market. As the "key minority", the controlling shareholders, actual controllers, and directors, supervisors and senior executives must stand up to the front and shoulder their responsibilities. At the same time, the China Securities Regulatory Commission will adapt to the needs of the development of new productive forces, optimize the institutional arrangements for issuance and listing, mergers and acquisitions, equity incentives, etc., and support those companies with innovation and development potential to accelerate their excellence and strengthening, not only to support the healthy growth of high-quality emerging enterprises, but also to support the transformation and upgrading of high-quality traditional enterprises, so that investors can better share the fruits of high-quality economic development.

　　We will further promote industry organizations to improve the level of professional services. Industry institutions should correct their business philosophy, return to their origins, keep integrity and innovation, abide by their fiduciary obligations, enhance their professional capabilities, and provide investors with more diversified and more suitable products and services.

　　We will further crack down on securities violations and crimes in accordance with the law. Since last year, the China Securities Regulatory Commission (CSRC) has resolutely implemented the requirements of "long teeth and thorns" and angular supervision, and the number of cases investigated and handled and the amount of penalties have increased significantly. The China Securities Regulatory Commission will work with relevant parties to improve the judicial system and mechanism for securities law enforcement, accelerate the construction of a comprehensive punishment and prevention system for preventing and combating counterfeiting in the capital market, further improve the efficiency of administrative and criminal linkage, make lawbreakers pay a heavy price, and earnestly maintain the order of the "three publics" in the market.

　　Further unblock channels for investors to protect their rights and remedies. In recent years, the revision of the Securities Law and the promulgation of the Futures and Derivatives Law have provided many new institutional mechanisms to resolve investor disputes and strengthen rights and interests relief, and some landmark cases have been implemented one after another. The China Securities Regulatory Commission (CSRC) will continue to sum up experience, make comprehensive use of these investor protection system tools, increase the application of litigation by securities special representatives, better play the role of mediation and arbitration, strengthen the docking of litigation and mediation, promote the model judgment mechanism, and make good use of advance compensation and party commitments in accordance with the law, so as to more effectively support investors to obtain compensation and relief. At the same time, the China Securities Regulatory Commission will mobilize all parties to strengthen investor education in a more targeted manner, help investors enhance their risk awareness, stay away from illegal financial activities, and better protect their legitimate rights and interests.

　　Create a good investment environment

　　The China Securities Regulatory Commission adheres to the law enforcement concept of "building systems, non-intervention, zero tolerance, and full coverage", and continues to strengthen law enforcement. In 2023, the China Securities Regulatory Commission (CSRC) will make a total of 264 administrative penalty decisions, with a fine of 6.773 billion yuan, 112 people banned from the market, and 103 people involved in the case transferred to the public security organs, effectively cracking down on violations of laws and regulations in the capital market.

　　On the day of the event, the China Securities Regulatory Commission also announced 12 investor protection law enforcement cases involving insider trading, market manipulation, trading using undisclosed information, illegal stock speculation by practitioners, and illegal occupation of funds of listed companies, and released 10 typical cases of investor protection such as Zeda Yisheng's special representative lawsuit, Amethystum Storage Advance Compensation Case, and the subrogation lawsuit of insured institutional shareholders Modern Avenue Capital Occupation Case, as well as 12 investment education products that are widely popular with investors, and introduced the overall law enforcement situation of the CSRC in 2023.

　　According to the China Securities Regulatory Commission, the handling of major cases is mainly reflected in the "four close watches".

　　The first is to keep an eye on the "key minority", focus on eradicating the "cancer" of the capital market such as fraudulent issuance and financial fraud, and promote the improvement of the quality of listed companies; the second is to pay close attention to the lack of diligence and responsibility, tighten and consolidate the responsibility of the "gatekeeper", and urge and guide intermediaries to improve the quality of practice; The third is to keep a close eye on "internal and external collusion", "self-theft" and "habitual offenders", maintain a high-pressure law enforcement posture against illegal shareholding reduction, market manipulation, and insider trading, and actively create a fair, transparent and predictable trading environment; Fourth, we should pay close attention to bonds, private placements, futures and other fields, resolutely show our swords to illegal acts, and leave no dark and blind spots in financial supervision and law enforcement.

　　This year, the China Securities Regulatory Commission will severely crack down on illegal acts in the securities and futures market that seriously endanger the smooth operation of the market, infringe on the legitimate rights and interests of investors, have a bad social impact, and have strong public reactions. Continue to strengthen the discovery of clues, strictly investigate major cases, and improve the efficiency of law enforcement.

　　In terms of clue discovery, the China Securities Regulatory Commission will increase the application of scientific and technological supervision, continuously improve the sensitivity and accuracy of clue discovery, strengthen cross-departmental, cross-field and cross-market supervision cooperation, strengthen the linkage between on-site supervision and off-site supervision, information disclosure and transaction supervision, on-site inspection and inspection and investigation, and resolutely eliminate regulatory gaps and blind spots.

　　In terms of major cases, the China Securities Regulatory Commission will focus on cracking down on illegal activities such as fraudulent issuance, financial fraud, appropriation of guarantees, and illegal shareholding reductions, and closely monitor and severely crack down on illegal acts that affect the normal order of the market, such as market manipulation and insider trading, so as to provide an open, fair and just market order for investors to enter the market.

　　Source: WeChat public account "Caizhi Headlines" is synthesized from: Daily Economic News, China Business News, The Paper, Finance Associated Press, etc

　　Editor-in-charge: Yuan Kai

　　Proofreading: Fenghua

　　Review: Gong Zimo